The healthcare insurance services market has been undergoing diversification, innovation and consolidation.
As a direct result of the Affordable Care Act, from 2011 to 2019 the profit margins of insurers could decline by more than 40 percent1. Recognizing that low-cost services will be fundamental to their success, numerous industry leaders are lowering administrative costs by restructuring their practices and increasing automation along with other initiatives to improve efficiency. These regulatory changes to the health insurance industry have led to an increase in acquisitions that promote a more consumer-driven health insurance business model.
Insurance services companies are seeking to expand their product offerings in order to offer payers and providers more efficient products. IMS Health Holdings, an insurance services industry leader, has made 11 acquisitions in the last 18 months mainly focusing on information technology geared toward the healthcare industry. One example is its announced acquisition of Cegedim SA’s information solutions and customer relationship management businesses for approximately $520 million. The acquisition will add a suite of CRM solutions used by clients in over 80 countries to drive sales effectiveness, optimize marketing programs and mitigate new regulatory compliance risks.